1. JIT and Lean Operations
CHAPTER 14
JIT and Lean Operations
Operations Management, Eighth Edition, by William J. Stevenson
Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin

2. JIT/Lean Production
Just-in-time (JIT): A highly coordinated processing system in which goods move through the system, and services are performed, just as they are needed,
JIT   lean production
JIT  pull (demand) system
JIT operates with very little “fat”

3. Benefits of JIT Reduced inventory (up to 90%)
Reduced lead time (up to 90%)
Reduced labor cost (up to 30%)
Reduced manufacturing & storage space (up to 50%)
Improvement of quality (up to 90%)
Increased flexibility and adaptability to changes
Increased productivity

4. Goal of JIT The ultimate goal of JIT is a balanced system.
Achieves a smooth, rapid flow of materials through the system

5. Summary JIT Goals and Building Blocks
Figure 14.1
Product
Design
Process
Personnel
Elements
Manufactur- ing Planning
Eliminate disruptions
Make the system flexible
Eliminate waste A
balanced
rapid flow
Ultimate
Goal
Supporting
Goals
Building
Blocks

6. Supporting Goals Eliminate disruptions Make system flexible
Eliminate waste, especially excess inventory

7. Sources of Waste Overproduction Waiting time
Unnecessary transportation
Processing waste
Inefficient work methods
Product defects

8. JIT Building Blocks Product design Process design
Personnel/organizational elements
Manufacturing planning and control

9. Product Design Standard parts Modular design
Highly capable production systems
Concurrent engineering

10. Process Design Small lot sizes Setup time reduction
Manufacturing cells
Limited work in process
Quality improvement
Production flexibility
Little inventory storage

11. Benefits of Small Lot Sizes
Reduces inventory
Less storage space
Less rework
Problems are more apparent
Increases product flexibility
Easier to balance operations

12. Lot Size and Cycle Inventory
Average cycle inventory
Lot size = 100
Lot size = 50
On-hand inventory
Time (hours)
100 –
75 –
50 –
25 –
0 –
Figure 16.1

13. HOOD & FENDER SETUP COMPARISON (800 TON PRESS)
Toyota
U.S.A.
Sweden
W. Germany
Setup Time
10 min
6 hr.
4 hr.
Setups/Day 3 1 -
1/2
Lot Size
1 day*
10 days
1 month
* For low demand items (less than 1000/month)
Up to 7 days

14. Personnel/Organizational Elements
Workers as assets
Cross-trained workers
Continuous improvement
Cost accounting
Leadership/project management

15. Manufacturing Planning and Control
Pull systems
Level loading
Visual systems
Close vendor relationships
Reduced transaction processing
Preventive maintenance

16. Pull/Push Systems
Pull system: System for moving work where a workstation pulls output from the preceding station as needed. (e.g. Kanban)
Push system: System for moving work where output is pushed to the next station as it is completed

17. LEVELED ASSEMBLY INSTRUCTIONS
Pull System
LEVELED ASSEMBLY INSTRUCTIONS
PRODUCTION SCHEDULE C B A
FAB
FAB
VENDOR B A
SUB
FAB
FAB
VENDOR
FINAL ASSEMBLY
FAB
FAB
SUB
VENDOR
FAB
FAB
VENDOR
VENDOR
FAB

20. Kanban Production Control System
Kanban: Card or other device that communicates demand for work or materials from the preceding station
Kanban is the Japanese word meaning “signal” or “visible record”
Paperless production control system
Authority to pull, or produce comes from a downstream process.

21. Traditional Supplier Network
Figure 14.4a
Buyer
Supplier

22. Tiered Supplier Network
Figure 14.4b
Supplier
Buyer
First Tier Supplier
Second Tier Supplier
Third Tier Supplier

23. Comparison of JIT and Traditional
Table 14.3
Factor
Traditional
JIT
Inventory
Much to offset forecast errors, late deliveries
Minimal necessary to operate
Deliveries
Few, large
Many, small
Lot sizes
Large
Small
Setup; runs
Few, long runs
Many, short runs
Vendors
Long-term relationships are unusual
Partners
Workers
Necessary to do the work
Assets

24. JIT II
JIT II: a supplier representative works right in the company’s plant, making sure there is an appropriate supply on hand.

25. Benefits of JIT Systems
Reduced inventory levels
High quality
Flexibility
Reduced lead times
Increased productivity

26. Benefits of JIT Systems (cont’d)
Increased equipment utilization
Reduced scrap and rework
Reduced space requirements
Pressure for good vendor relationships
Reduced need for indirect labor